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tion of the United States, it is clearly the will of the people that everything that can be done by Government, by private enterprise, by cooperative associations, should be done to improve the way of living of this great body of our fellow citizens. In 1936, we had eight States which enacted unemployment-compensation laws. Two of these laws will be effective upon the adoption by the State of constitutional amendments which are to be voted upon this autumn. Twenty-two States have already enacted laws or have amended portions of their constitutions dealing with assistance to the aged.
Legislative achievements were not confined, however, to socialsecurity enactments. Among the most significant legislation passed in 1936 were laws in Kentucky, Louisiana, and South Carolina setting up unified and independent-labor departments, and I want to extend a particular welcome to the labor commissioners of those States who are present at this meeting. I know Mr. Nates is here from South Carolina. It is exceedingly important to recognize that these States, which we have often thought of as being predominantly agricultural, have recognized the importance of having unified-labor departments to look after the welfare and the progress of the industrial wage earners of their communities. We should all reconsider and reaffirm our belief that independent labor departments are necessary and preliminary to improving the hours and working conditions of those who labor in the mines, mills, factories, stores, laundries, restaurants, and hotels in all of our great States. It has been a great pleasure to cooperate with some of your States in surveys of the labor and industrial problems of such States preliminary to the enactment of a lawregulating industry or setting up a labor department.
A law or a rule ought to spring out of the real problems of the community or State, for there it will have real public support in its enforcement. In New York we have a peculiar law with regard to industrial diseases. I always cite this to indicate how absurd it is to copy a law. We have in New York, as you probably know, one iron mine and one talc mine. The iron mine operates about once in 5 years for 2 months, the tale mine is not much more active. We have a law, however, with regard to industrial diseases which specifies the coverage of 18 miners' diseases, copied outright from the British Industrial Disease Act. Very fine for England, where mining is one of the great industries, and where the disease hazards of that industry are of prime importance, but of very little account to the people of New York. I cite this to show how wise it is to make a survey of the problem first, so that you may know the law covers the problem you have and not a problem that somebody in Australia once had. So let us have knowledge first, and let me pledge to you once again the help and assistance of the United States Department of Labor in securing any knowledge you may want with regard to conditions in your State, and, for comparative purposes, the conditions in other States.
I want also to remind you of another line of cooperation, and that is the technique of the training of factory inspectors. I think nothing has been so good practically and so useful from the point of view of the real interest of John Jones and Mary Smith out in the factories as that program of training and correction carried on in Baltimore through the cooperation of the State, the Johns Hopkins University, and the Federal Department of Labor. We hope to do this again next year, offering 2 or 3 weeks of training. We hope to offer that opportunity regularly at periodic intervals, with the cooperation of all the States and of some institution of education which can organize and regularize our techniques of instruction. One of the interesting
. things about that conference was that when we came to look for those who were best qualified, we found them already working in some labor department of the United States of America-we found them persons with long experience and real responsibility in the carrying out of this kind of labor legislation for which we are working today. And so I felt that that whole conference developed the opportunity of cooperation in the learning of new techniques. We are now publishing a manual for factory inspectors in which we hope to reduce to the simplest possible terms what inspectors must look for. It enables a new inspector to take hold of his work, not only with good will, but with some assurance that he can put his finger upon the rudiments, at least, of the basic technical knowledge that he needs in order to help to prevent John Jones and Mary Smith from getting their hands cut off or their eyes put out, to help to prevent them from being exploited on wages, hours, etc. There is a right way and a wrong way to do these things, and the factory inspectors and labor officials of this country want to know the right way of doing them.
And so I am particularly interested in the development of labor legislation and labor programs in the State and Federal Governments on a creative basis of learning more and making our approach to every problem a creative problem in democracy. That means bringing into conference the people who are affected by the ruling—both employers and workers-for the purpose of finding a method of persuading both of them to adopt and support a reasonable, rational, and practical method of living under our modern conception of minimiim standards effected by law under our social contract. For, no matter what our political changes in this country may be, we have to go on with a program of promoting equality of opportunity for all the people of our country. I want to lay down for you today just one idea--the equality of opportunity for wage earners, which must consist of something more than the right to vote at elections for a political representative and the right to be tried by a jury of their Siers when they have committed crimes. These are very important, bit for a wage worker it is almost, and I was about to say more, important that he should have the opportunity to work—that he should have the opportunity to work regularly, to work for wages which will buy him an American standard of living, to work under conditions that will not damage his person or his mind, and to work under conditions which mean a kind of assurance of protection in his old age,
in illness due to accident or disease, and in unemployment over which he has no control. This is a part of our great American aspiration for a democracy based upon equality of opportunity, and insofar as you and I are privileged to serve and to think, these are our major problems. The technical aspect of those problems is difficult, but not too difficult to those who have sworn on for the duration of the problem.
Present Status of Unemployment Compensation
Report of Committee on Unemployment Compensation, by Paul RAUSHENBUBA,
America has until recently lagged behind the older industrial countries of Europe in providing some measure of systematic protection against unemployment. England has had an unemployment-insurance system ever since 1911. Many other countries have enacted similar legislation during the past decade. By comparison, America's progress in this field is very recent.
Unemployment Compensation Laws Enacted up to September 1, 1936 In June 1935 the Dominion of Canada enacted an unemploymentinsurance measure modeled on that of England. Unfortunately this Dominion-wide law was declared invalid by the Supreme Court of Canada in an advisory opinion delivered in June 1936. The Dominion Government's appeal from that decision is now pending before the Privy Council. Since the Canadian act has not yet become effective, no attempt to deal with its provisions is made in this report.
In the United States, meanwhile, substantial progress has been made during the last few years. The need for unemployment-compensation laws is now generally admitted in this country. There is increasing popular support for such legislation as an essential part of any long-run program to provide increased economic security for American workers.
Under our American federal system of government it is primarily the province and the responsibility of the several States to enact unemployment-compensation laws for the protection of their workers. Perhaps the chief obstacle to the enactment of unemployment-compensation measures in the several States was the fear of interstate competition from States having no legislation of this type. The Federal Social Security Act, enacted in August 1935, has practically removed this obstacle to the passage of State laws, and has effectively encouraged State action in the field of unemployment compensation.
Noteworthy progress has accordingly been made during 1935 and during 1936 to date. Twenty months ago, in January 1935, only one American State had an unemployment-compensation measure enacted and in operation. Several additional laws were passed during the spring of 1935, in anticipation of Federal action. Up to the present time a total of 15 State unemployment-compensation laws have been passed, in addition to the District of Columbia law. The action already taken in these 15 States should in itself encourage the remaining States to pass similar laws.
Table 1 shows what States have thus far enacted laws, and when, the dates on which contributions accrue, and the estimated number of workers covered. The existing laws cover over 8,000,000 employees, which is nearly 45 percent of the total number of American workers to whom such legislation will apply when adopted by every State.
TABLE 1.-State unemployment compensation laws (as of Sept. 1, 1936)
Date contributions accrue
coverage (number of employees)
Employers' Employees' contributions contributions
Jan. 1, 1937
Sept. 14, 1935 | Jan. 1, 1936
1, 1936 Apr. 25, 1935
----.do.. Nov. 15, 1935
...do May 5, 1936 do. June 6, 1936 July
260,000 1, 590,000
70,000 (1) 750,000 (1) 940,000 100, 000
200.000 220, 000 230, 000 (1) (1) 420,000
I No State estimate on coverage available.
· The Louisiana law was approved by the Governor on June 29, 1936, but does not become operative unless and until a constitutional amendment is approved by the electorate in the general elections of 1936, permitting the establishment by the legislature of an unemployment-compensation system.
3 Utah first passed a law in March 1935 but repealed it and passed a new law in August 1936.
The State unemployment-compensation laws so far passed in this country differ widely in details, and even on major points, some of which will be discussed later in this report. Nevertheless, it is noteworthy that the American unemployment-compensation laws have many important features in common. Under all these laws, employers are required to pay all or the major part of the costs of unemployment compensation, in the form of periodic advance contributions to a special State unemployment-compensation fund. Contributions are measured as a percentage of pay rolls. Most of the State laws provide for eventual merit rating, under which an employer's contribution rate may rise or fall, depending on his unemployment-benefit experience. In this way most of the American laws seek to encourage steadier employment.
The right to benefits is limited to the employees of covered employers, and bears a definite relation to previous employment. Unemployment benefits compensate the worker for only a part of his